Snowflake just had the biggest-ever software IPO. Execs at Coatue, Fidelity, and FactSet explain why they were early adopters of the company’s data exchange and how it can transform Wall Street.

Philippe Laffont

Summary List Placement
As Wall Street’s obsession with data continues to grow, firms are eager to make digesting information as easy as possible.
Snowflake, which posted the biggest-ever software IPO on Wednesday, has launched a data exchange that already counts hedge funds like Philippe Laffont’s Coatue and data vendors like FactSet as users. 
“I think it’s going to be the way people want to access data in the future,” the chief technology and product officer at FactSet told Business Insider.

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The story was originally published in March 2020 and has been updated to reflect Snowflake’s recent initial public offering.

Financial firms — from the biggest banks and asset managers to small family offices — are using more data than ever.

The flood of information has proved valuable for their investing strategies. But there is a cost to managing so much data, and it’s not just the money spent paying for the feeds.

“A lot of time, effort, and tech is wasted on just moving data around and formatting in a way that makes it usable for analytics,” Gene Fernandez, the chief technology and product officer at the data giant FactSet, told Business Insider. “It’s attractive to everybody if we can kind of reduce the amount of time that’s spent on that low-value, pretty far away from the use case effort.” 

Enter Snowflake, the buzzy San Mateo, California-based company that posted the biggest-ever software IPO on Wednesday, raising $3.4 billion. The company helps firms manage data across public-cloud providers.

During the summer of 2019, Snowflake rolled out its public data exchange — where data consumers like Philippe Laffont’s Coatue Management can connect with and receive feeds from providers like FactSet.

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With that launch and encouragement from customers, particularly those on Wall Street, Snowflake is slowly rolling out private exchanges managed by the data consumers themselves to a select group of clients and has a wider launch planned for the summer.

“I think it’s going to be the way people want to access data in the future,” Fernandez said.

Alex Izydorczyk, Coatue’s head of data science, cited Snowflake’s initial position as a data warehouse as a reason the exchange is so appealing.

The company didn’t set out to solve this problem. Matt Glickman, a Snowflake executive who is leading the exchange business, told Business Insider “it just fell out of our core product.” 

For that very reason, Izydorczyk said, Snowflake’s data exchange has a leg up. 

“The data exchange integrates with the warehouse, effectively, allowing data vendors to transfer data to customers’ data warehouse without additional engineering effort,” he said via email. “This removes the step that is traditionally necessary to integrate an organization’s data into a single warehouse. The seamless nature of that process made it appealing and differentiated.”

That step — exact, transform, load — can take “hours or days,” Izydorczyk said, a significant amount of time for hedge funds that are constantly searching for an undiscovered trade.

Sunil Desai, Fidelity’s vice president of data architecture, said it saves his firm four to six …read more

Source:: Business Insider


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